At the same time, an unusual start to summer has opened up many investment themes – from consumer spending to power demand – leaving investors wondering where the real opportunities lie.
Market expert Neeraj Dewan believes that the environment calls for caution but also offers excellent opportunities for investors willing to take a long-term view.
Volatility returns after a brief period of stability
Markets witnessed a rally following the trade deal announcement, but the past two weeks have reversed the trend as geopolitical risks intensified.
“The last two weeks have not been great for the market. After the trade deal announcement, things have been steadily improving and you’ve seen some broad participation in the market. But then two weeks again with all this war and crisis, things are completely different now.”
Uncertainty about crude oil prices is particularly important for India and other Asian economies that rely heavily on imported energy.
Energy presents defensive tactical opportunities
Despite the volatility, Dewan believes some pockets of the market could benefit in the near term – particularly energy companies and the defense sectors.
“There are some short-term opportunities that could be in the form of an energy company, something like you mentioned ONGC, whether it’s Coal India or other power companies that have coal mines, so there are opportunities there. And defense may also come into play again. There are FMCG companies where again people will go to defence.”
Companies such as Oil and Natural Gas Corporation and Coal India could benefit from rising energy prices, while defensive sectors such as FMCG and pharmaceuticals may attract investors seeking stability.
“There are pharma companies that if you get a dip there, those are also opportunities because pharma is a space that has been strong post-Covid and may continue to be strong in the future.”
Patience is the key for long-term investors
Dewan cautioned that investors should avoid rushing into the market despite corrections being seen in many stocks. “If you’re an investor with some extra cash in this type of market, you don’t need to rush to buy right now because you’re getting better opportunities every day. The stocks you love are improving every day.” He added that investors should hold back their investments and be prepared for long-term volatility.
“One has to be a little bit more cautious in spending money but certainly put a small amount in the dips, but then it can go a long way because you have never seen a fight like this before.”
Food delivery platforms have been interesting for a long time
Dewan also sees long-term potential in India’s food delivery platforms, while stocks may remain volatile in the near term. Platforms like Swiggy and Zomato have recently corrected, creating what he believes could be a gradual accumulation opportunity.
“For someone who has money and he invests for two to three years, I think these are opportunities. Because of this particular event, the stocks have been corrected and these are opportunities where one can accumulate it slowly. Of the two, I like the eternal more. So I will look at it.”
Auto stock correct, but the construction story is correct
The correction in auto stocks also caught the attention of investors, especially with the growing electric vehicle (EV) theme. Dewan identified companies like Mahindra & Mahindra and TVS Motors as strong long-term portfolio names. “These are good companies, these are portfolio stocks and some events like this correct them. So, for the portfolio investor, these are definitely opportunities.”
However, he cautioned investors not to think the correction is over. “Don’t expect that you can buy it today and you won’t see another correction. If you are prepared that you can buy on dips, you can add more if the stock goes down a lot and invest for a few years, I think these are good opportunities.”
The consumption outlook is subject to short-term noise
Recent data has shown strong consumption trends following the GST cuts and tax relief measures, but Dewan expects short-term disruptions due to geopolitical uncertainty and seasonal liquidity pressures.
“There could be a bit of a slowdown this quarter because of all the noise that’s coming in and any liquidity in March that’s going to be hit by pre-tax.”
Still, he believes domestic institutions remain largely intact. “I am not saying that there is any fundamental problem domestically. Things are good domestically. GST reduction, income tax relief that we got last budget, there are many things that are playing for the domestic market.”
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Finally, Dewan pointed to opportunities in the top public sector companies, particularly in the energy and mining sectors. “From the PSU basket to energy stocks and even mining and mineral companies there you get corrections, maybe there is an opportunity for long-term investors.”
Companies like NTPC and NTPC Green Energy could also see investor interest as energy markets tighten. “As crude and gas prices go up, I think they can get some profit from them.”
While markets remain uncertain due to geopolitical developments and rising energy costs, Dewan believes the correction opens up selective opportunities. For investors with patience and a long-term horizon, a gradual accumulation of quality stocks—especially during declines—could prove beneficial when global conditions stabilize.
